Remarks by Mayor Michael R. Bloomberg at a Public Hearing on Local Laws

"The first of four bills before me today is Introductory Number 704-A, sponsored at the request of the Administration by Council Members Fidler, Williams, Brewer, Chin, Dromm, James, Koslowitz, Rivera, Wills, Comrie, Dickens, Ferreras, Garodnick, Lander, Nelson, Palma, Jackson, Arroyo, Mark-Viverito and Barron. Introductory Number 704-A maintains the additional .875% tax on the occupancy of hotel rooms throughout the City for two years.

"The aggregate hotel tax on a room rental in the City is 14.75% and this rate is comparable to other municipalities throughout the country. The tax is comprised of the City hotel tax of 5.875%, City sales tax of 4.5%, State sales tax of 4%, and the Metropolitan Commuter Transportation District sales tax (for counties served by the MTA) of .375%. The 5.875% City tax was increased from 5% in 2009 and expired on December 1st of this year.

"The 2009 rate increase did not lead to a drop in tourism or hotel rooms purchased. The City actually experienced an increase of about 17% in room nights sold over fiscal year 2009 through fiscal year 2011. From September 2009 through September 2011, hotel revenues per room have grown by about 20%, further evidence that visitors to New York City are not deterred by the current rate of hotel room occupancy tax.

"Without the extension of the current rates, the City will lose about $30 million in revenue in this fiscal year and about $60 million in the next. Since 2008, City agencies have taken more than $5 billion of gap-closing actions to help maintain budget balance this fiscal year. Even with these actions, the City is facing multi-billion dollar budget gaps in future years. If the hotel room occupancy tax rate were to sunset, the City would be forced to consider additional budget cuts. Renewing the existing rate of the hotel room occupancy tax will allow the City to preserve a substantial revenue source that is necessary to the City's financial health.

"I would like to thank Office of Management & Budget Director Mark Page and his staff for their work on this bill along with my Office of City Legislative Affairs. I would also like to thank the City Council for approving this legislation."